Calculating a partnership basis is one of the most important things that we do as practitioners. However, it is also one of the most confusing. When we use the term basis, we really could be referring to one of three different things! This course will explore the differences between inside basis, outside basis, and 704(b) basis. We will show you how to distinguish between these terms more easily through several examples and practice problems. We will also explore the tax implications of the initial contributions of property to a partnership.
Learning Objectives:
- Define inside basis, outside basis, and 704(b) basis
- Identify the concept of substantial economic effect and why it is important
- List the three requirements that need to be present for an allocation to be deemed as having economic effect
- Determine the reallocation of items of gains and loss under IRC 704(b) when a qualified income offset is present
- Determine the tax effects of transferring cash, property, and services to a partnership
- Identify the tax effects of contributing assets to a partnership that are burdened by debt
David Peters, CPA, CFP, CLU, CPCU, MST, MBA
Peters Professional Education, LLC
Founder and Owner
[email protected]
(804) 332-1373
David Peters is the founder and owner of Peters Tax Preparation & Consulting in Richmond, VA, and a Financial Advisor for Peters Financial, LLC. He has over fifteen years of financial services experience, including three years in the hedge fund industry and six years in the insurance industry. David was the first-ever Chief Financial Officer at Compare.com - a position he held for over three years. He is a national CPE Instructor/Discussion Leader for the AICPA, Kaplan, and Surgent and was a recipient of Surgent’s Outstanding Discussion Leader award for 2019. He regularly teaches accounting, finance, insurance, financial planning, and ethics throughout the United States. He is the advisor for Business & Industry topics for the SC Association of CPAs and was a recipient of The American College’s 2019 NextGen Financial Services Professional Award. He holds four Master’s degrees and is currently pursuing his Ph.D. in Financial Planning. He regularly contributes to various CPA publications, including NCACPA’s Interim Report, SCACPA’s CPA Report, and VSCPA’s Disclosures. He was also a co-author of the 2018, 2019, and 2020 versions of the Virginia CPA Ethics course – a required course for all CPAs licensed in the Commonwealth of Virginia.
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